Osakwe, A. C, and Agbo, Elias Igwebuike and Okonkwo, Emeka Jude EFFECT OF MONETARY POLICY INSTRUMENTS ON BANKING SECTOR CREDITS IN NIGERIA. Advance Journal of Management, Accounting and Finance, 4 (4). pp. 32-45. ISSN 2364 – 4219

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The study examined the effect of monetary policy instruments on banking sector credits in Nigeria. The researcher employed three price-based monetary policy tools including monetary policy rate, cash reserve ratio, Treasury bill rate while liquidity ratio was also introduced as a control variable. Data analyses involved Augmented Dicker-Fuller (ADF) unit roots test, Johansson co-integration test, Vector Error Correction model and Impulse Response Function (IRF). The Co-integration result showed that there is long run relationship between monetary policy tools and bank credit such that MPR and LIQ has significant positive long run effects while TBR and CRR had significant negative long run effects on bank credit in Nigeria. The Vector Error Correction Mechanism (ECM) showed that monetary policy in Nigeria is a reliable short term mechanism for controlling the banks in Nigeria vis-à-vis financial intermediation functions. The impulse response function has shown that all the monetary policy variables (MPR, CRR, TBR and LIQ) have negative effects on bank propensity to grant credit in Nigeria. The study generally recommends that price-based monetary policy tools should be used in short term regulation stance of the government.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HJ Public Finance
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 31 May 2019 08:33
Last Modified: 20 Sep 2019 10:34
URI: http://eprints.gouni.edu.ng/id/eprint/1612

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